Access and forward-looking charges reform
Ofgem's launch of a significant code review (SCR) started a process which seeks to implement wide-ranging and holistic reform in access and forward-looking charges.
As part of this process, Ofgem have decided to review:
- access rights for small and large users with the aim of increasing the choice of arrangements
- how forward-looking charges on the distribution network can work to encourage efficient use of the system
- how charges to connect to the distribution network can work in line with forward-looking charges to reduce barriers to connection while still sending a strong signal to efficiently use the network
- how forward-looking charges on the transmission network can work to create consistent signals for generators connected across all levels of the network
What is the access and forward-looking charges review?
On 18 December 2018 Ofgem launched their significant code review (SCR) in access and forward-looking charging.
The review set out to ensure that electricity networks are used efficiently and flexibly, and ensure they reflect users’ needs, allowing consumers to benefit from new technologies and services. The review aimed to do this while avoiding unnecessary costs on energy bills.
On 30 June 2021, Ofgem published its access and forward-looking charges minded-to consultation. This includes Ofgem’s proposals on access rights, connection charging and transmission network charges.
Read the consultation document
We also published a podcast, in which we cover an overview of the consultation, as well as the FAQ's on connection charging, transmission charging, and access rights.
Listen to our access and forward-looking charges consultation podcast
What are access arrangements and forward-looking charges?
Access arrangements
These are rights a user has to access the electricity network. It comprises a connection from the user’s equipment to the wider network and an allocated capacity on that wider network. This capacity is the amount of power a user can demand or supply to their target market through the network.
Forward-looking charges
Forward-looking charges are the elements of a charge to use the network that vary with certain behaviours and decisions a user makes. They seek to reflect and indicate to users how their behaviours can increase or reduce future costs on the network. In this way they aim to encourage efficient use of the network.
The scope of the review
The SCR scope includes:
- a review of the definition and choice of access rights for transmission and distribution users
- a wide-ranging review of distribution network charges (Distribution Use of System (DUoS) charges)
- a review of the distribution connection charging boundary
- a focused review of transmission network charges (Transmission Network Use of System (TNUoS) charges)
Ofgem are planning towards the following milestones for concluding the SCR and implementing the outcomes:
- Access SCR Minded to Consultation closes – 25 August 2021
- Publish Final Access SCR decision – expected late 2021
- Decision on relevant code modifications – expected in 2022
- Reforms begin to take effect – from 1 April 2023
Stakeholder input
To help progress the review Ofgem, set up two new groups: the challenge group, and the delivery group.
These groups will ensure that the SCR is carried out in an open and transparent manner, collect ongoing wider stakeholder input, and focus the necessary expertise and network data to help develop and assess options in a timely manner.
Challenge group
The purpose of the challenge group is to provide ongoing wider stakeholder input into the SCR. This will provide a challenge function to the work of the delivery group, ensuring policy development takes into account a wide range of perspectives and is sufficiently ambitious in considering the potential for innovation and new technologies to offer new solutions.
Challenge group resources can be found in the document archive tab.
Read the challenge group terms of reference
Delivery group
The purpose of the delivery group is to provide knowledge and experience of how the networks are planned and operated, and to help develop and assess options. The delivery group may set up specific working groups to produce deliverables in an agile, flexible manner.
Membership will be limited to Ofgem, NESO, distribution and onshore transmission network owners, the Energy Networks Association (ENA), relevant code administrators (eg DCUSA and CUSC), and a representative for IDNOs. Membership of the delivery group is limited to ensure we get the necessary expertise and network data to help us develop and assess options in a timely manner. The delivery group will also be able to identify where they need input from wider stakeholders, including within any working groups.
Delivery group resources can be found in the document archive tab.
Read the delivery group terms of reference
SCR secretariat
The Energy Networks Association (ENA) provides the secretariat function for both the challenge group and the delivery group. ENA brings regulatory, commercial, and technical expertise to support delivery of the SCR.
We have published a glossary that includes definitions of many of the terms that are being used in the SCR.
Further documentation can also be found on the Ofgem website.
Launch resources
Ofgem's significant code review launch letter
Charging Futures access SCR launch podcast
Listen to Andy Burgess and Stephen Perry from Ofgem talk about the SCR's key areas.
SCR overview webinar - 7 January 2019
Watch the webinar that the lead secretariat hosted with Ofgem which gives you an overview of the SCR.
Access and forward-looking charges consultation summary note
Working papers and consultations
Access and forward-looking charges significant code review – minded-to positions update – 24 January 2022
Ofgem has published a further consultation which sets out updates to their minded-to positions. These positions respond to the feedback they received in their previous consultation which closed in August 2021.
Access and forward-looking charges minded-to consultation – 30 June 2021
Ofgem’s proposals on access rights, connection charging and transmission network charges.
Access and forward-looking charges significant code review – winter 2019 working paper
As part of Ofgem’s programme, in December 2018 they launched a significant code review (SCR) into network access and forward-looking charging. The objective of the SCR is to ensure that electricity networks are used efficiently and flexibly, reflecting users’ needs and allowing consumers to benefit from new technologies and services while avoiding unnecessary costs on energy bills in general.
This is the second of two working papers Ofgem published in 2019, and consists of a suite of discussion notes setting out our current thinking on:
- options for reforming the distribution connection charging boundary
- options for focused reforms of transmission network charges
- how options could be applied to small users
- external inputs into our work
- current arrangements
The paper also includes a consumer panel report, a behavioural insight report on small users, and illustrative examples.
Access and forward-looking charges significant code review – summer 2019 working paper
This is the first of two working papers Ofgem published in 2019, and consists of a suite of discussion notes setting out the context and our approach to this SCR, and our our current thinking on:
- options for reform of access rights for distribution and transmission
- network charges
- options for improving locational accuracy of distribution charges
- charge design options for distribution and transmission charges
- linkages between options for reform
- linkages with procurement of flexibility
- engagement with industry stakeholders
Ofgem's Consultation – July 2018
Getting more out of our electricity networks through reforming access and forward-looking charging arrangements.
Stakeholder engagement and webinars
Baringa's analysis
Getting more out of our electricity networks through reforming access and forward-looking charging arrangements
Consultation podcast
Listen to the lead secretariat covering the main points from the consultation.
Read a summary of views given on our series looking at the access and forward looking charges consultation.
Active network management charging webinar
Access webinar
An overview of the access work to date, introduced by Jenny Doherty (National Grid ESO and presented by Stephen Perry (Ofgem).
Locational granularity and cost drivers webinar
Webinar with Patrick Cassels (Ofgem) and Beth Hanna (Ofgem).
Ofgem supplier engagement introductory webinar
Presented by Amy Freund and Silvia Orlando (Ofgem).
Trading of curtailment and exchange of access rights webinar
Full webinar hosted by the non-SCR access working group, which covers products 1 and 2, trading of curtailment, and exchange of access rights. Presented by Chris Allanson (NPG) and Paul McGimpsey (ENA).
EDCM/CDCM model training webinar
Presented by Dave Wornell and Simon Yeo (WPD).
TNUoS webinar
Ofgem provided an updated on their thinking on TNUoS options as part of the access and forward-looking charges SCR.
Impact assessment webinar
Ofgem provided an update on their Impact assessment and packaging of options for the access and forward-looking charges SCR.
Challenge and delivery group for the access SCR webinar
The joint challenge and delivery group for the access SCR webinar was held on Monday 9 November 2020.
26 February 2019
| Charging design discussion note | Presentation | Minutes |
2 April 2019
| Presentation | Minutes |
14 May 2019
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24 July 2019
| Presentation | Minutes |
30 September 2019
| Presentation | Minutes |
25 November 2019
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20 January 2020
| Presentation | Minutes |
9 June 2020
| Presentation |
10 June 2020
| Presentation |
26 March 2021
| Webinar | Slides |
4 February 2022
| Webinar | Q&A | Slides |
21 January 2019
| Agenda | Minutes |
13 February 2019
| Slides | Agenda | Core capacity | Minutes |
6 March 2019
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4 April 2019
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10 May 2019
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27 June 2019
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26 July 2019
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3 September 2019
| Presentation | Minutes |
9 October 2019
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21 November 2019
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17 January 2020
| Presentation | Minutes |
10 November 2020
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26 March 2021
| Webinar | Slides |
9 June 2021
| Minutes |
Working group publications
Connection boundary - a review of the distribution connection charging boundary, considering whether there is merit in moving to a shallow connection boundary.
Connection boundary - initial option listing
The report describes a number of options for amending the current distribution connection charging arrangements, giving consideration to more shallow approaches, and examines the rationale for introducing some form of liabilities and or securities.
Access - reviewing the definition and choice of distribution and transmission access right.
This report provides an overview of the basis upon which the GB network operators currently design and operate their electricity networks, highlighting differences in approach and planning standards across transmission and distribution.
This report outlines a range of potential options which could form part of a user’s access choice in the future, beyond current planning and commercial arrangements.
This is the annex to SCR access report 2, containing detailed initial assessments of future options for access arrangements.
The access SCR is considering how different access choices may benefit customers and network operators. Failure to adhere to the parameters of access products could negatively impact on the electricity network, resulting in drawbacks for customers. This paper considers options for monitoring and enforcement.
Market participation spreadsheet
This spreadsheet aims to identify relevant energy markets (both current and future) and the compatibility between those markets and each access choice. Where barriers are identified, options for their removal are identified.
The access SCR is considering a range of access products. This spreadsheet provides a description of each, assessing their feasibility giving consideration to such areas as metering, data collection and processing requirements, standards and control equipment.
This paper explains the similarities and differences between the concepts of sharing and trading of access. Further, it considers four key principles (transparent information sharing, ability to maintain network continuity, visibility of other potential sharing parties, and transparent sharing arrangements) and considers how they might be applied to both concepts.
Distribution of connected users’ access to transmission network
This paper considers options for how distributed generation might be given formal access to the transmission system. It discusses current arrangements and options for change in the future.
Financial firmness considerations note
This note is to capture considerations for, and the implications of, the inclusion of a financial firmness access choice in shortlisting. It is collated from the thinking of members of the access SCR subgroup.
This report by the SCR access subgroup aims to define local shared access rights, including qualifying criteria and potential supporting processes.
This paper explores options for implementing non-firm access for distribution network users. The options considered cover how curtailment is defined, how it is measured and what actions can be taken when curtailment is considered to have exceeded agreed levels.
Access options at transmission
This paper explores the access options at transmission. Options cover non-firm access and time of use access for generation and options for demand connections to the transmission network.
The subgroup has developed a number of non-firm access standardised options. This report explores a shortlist of hybrid approaches to the standardised options. Hybrid options could involve either standardised options that can be tailored to reflect certain users’ or networks’ requirements, or standardised options that can be tailored up to certain limitations.
Locational cost model - examining what costs should be in the forward looking signal, how costs vary by location and how they can be signalled to users.
SCR cost driver consolidated report
This report sets out the foundational analysis of the drivers of network costs to help shape the choice and analysis of charging and access rights. In particular, the report contains information on the level of seasonality and locational pricing, to enable consideration of charge design that will better manage times of peak congestion.
SCR locational granularity of charging report
This report provides an overview of the current forward-looking use of system charging regime and considers how increased granularity might be introduced for distribution charges and options for improving consistency across how these charges are set at transmission and across distribution voltages.
DUoS charging design - assessing changes to how charges are designed to improve cost reflectivity and signals to users.
Charging design - initial options listing
The purpose of this report is to finalise charging design options, grouping these between those applying to demand and generation users.
TNUoS charging design - assessing changes to the charge design for demand TNUoS and whether distribution users should face TNUoS charges.
Charging design - initial options listing
The purpose of this report is to finalise charging design options, grouping these between those applying to demand and generation users.
Small users - assessing whether the options can be applied to small users or amendments are required.
This spreadsheet shows the assessments of the access and charging options carried out by a cross-industry stakeholder group focused on small users in November/December 2019.
Find out more
You can contact Ofgem directly on access and forward-looking charges via [email protected].
For any other questions on charging reform or Charging Futures, contact us at [email protected].
You can also sign up to the Charging Futures mailing list if you would like to find out when the next Charging Futures forum is.